Live Nation's Latest Rebel Move

Live Nation, which has been on a tear recently with major artist signings and its own ticketing system that will soon replace a contract with Ticketmaster, has confirmed that it will sell unprotected MP3s from three of the four major labels. Rather than an iTunes-style database, Live Nation's MP3 store will route fans to artist pages somewhat similar to the ones found on MySpace.

The deal represents another major label move away from DRM, but it also strengthens Live Nation's position as a one-stop-shop for all things relating to its artists. With deals worth hundreds of millions of dollars with high-flying artists like U2, Jay-Z, Nickelback and Madonna, the Ticketmaster contract set to expire in December and plans to launch its own ticketing service that will include one of Ticketmaster's biggest former clients, the company now handles everything from merchandise to show tickets to distribution. Add to that list, "DRM-free music store."

Live Nation has deals with Sony Music, Universal Music Group and EMI to sell their music in an unprotected MP3 format from artist pages on its own site, according to Digital Music News. At least one artist has been complaining recently about iTunes lacking a strong "artist page" like the ones found on MySpace, because artist pages can draw fans in ways that just aren't possible with a list of albums -- think blogs, comments, images, videos and all the other stuff that typically surfaces on a band's MySpace page. It sounds like Live Nation's been listening; its direct-to-fan music sales could be just what the labels ordered.

Live Nation is accomplishing most of this through its MusicToday division, a 51-percent stake in which Live Nation acquired in 2006. MusicToday made its name managing direct band-to-fan relationships for clients like the Rolling Stones, the Grateful Dead and the Dave Matthews Band, for whom it ran fan clubs, e-commerce, VIP programs and secondary ticket sales, and now it's ramping up its direct-to-fan business with MP3 distribution, thanks to these label deals. Warner Music Group could apparently sign on as well, giving Live Nation the ability to sell MP3s from all four major labels.

Essentially, Live Nation is turning into a microcosm of the music business at large. If you're a fan of one of its bands, you're going to spend money on them eventually, whether its a concert ticket, a T-shirt, a CD, fan club access to exclusive "VIP" content, an MP3 from an artist page or whatever. And when you do, Live Nation will be there to take a slice of the pie -- a savvy business strategy when no one knows for sure where the bulk of music revenue is going to come from.

Even in advance of its ticketing contract expiring with Ticketmaster, Live Nation's third-quarter results (.pdf) look strong. The company produced 17 percent more concerts than it did in the same quarter of last year, while attendence increased 6 percent and revenue jumped 9 percent.

"Looking ahead, our primary goal remains centered on maximizing our global concert pipe for our client - the artist," explained president and CEO Michael Rapino, "and expanding into direct ticketing/online distribution, completing the world's only concert-to-fan direct platform for artists."

I guess this is part of what he meant by that.

We've asked a Live Nation spokeswoman when the company plans to start selling these MP3s and hope to post an update soon.

by Eliot Van Buskirk for Wired.com

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